Gen Z fast fashion giant Shein may not be quite ready to take the plunge into stores just yet but the prospect has certainly taken a big step forwards.
Hooking up with Authentic Brands and North America’s biggest retail real estate group, the contentious Chinese apparel colossus – which in recent times has been on a charm offensive over its sustainability record – has well and truly thrown the cat among the pigeons in the U.S. fashion market.
So how does the new deal shake out?
Sparc Group Holdings and Shein have announced that they have entered into a “strategic partnership” under which Shein will acquire an approximately one-third interest in Sparc Group (Simon Properties Authentic Retail Concepts), the joint venture that includes Authentic Brands Group and mall giant Simon Property Group
SPG
In addition, Sparc Group will become a minority shareholder in Shein.
Sparc typically invests in distressed retailers and has been able to keep a variety of well known brand names in Simon’s malls thanks to acquisitions.
This time around, distressed Shein mostly definitely is not.
The deal means that Shein will bring its e-commerce fast fashion expertise and global reach to provide Sparc Group with a platform to help grow its brands, the companies said in announcing the deal.
The partnership is expected to expand Sparc Group’s distribution of fast fashion retailer Forever 21 to Shein’s 150 million online users, while the partnership also offers the opportunity to test Shein in Forever 21 locations across the U.S. including shop-in-shops, enabling return to store and other initiatives.
“Together, Shein and Sparc Group plan to utilize their complementary platforms and expertise to accelerate product innovation, explore new business strategies, enhance customer experiences, and grow their presence in the marketplace,” the companies said.
Simon, Authentic And Shein
Simon Property owns around 12% of Authentic Brands Group, valued at roughly $1.5 billion, Simon said at its earnings call earlier this year, with the joint venture including brands such as Nautica, Reebok, former fast fashion star Forver 21, plus stalwart Eddie Bauer (which it part-traded with ABG for a larger stake in the parent) and Lucky.
Last year, ABG purchased U.K. fashion brand Ted Baker in a deal valuing the troubled brand at a highly discounted $253 million. It also owns a majority stake in Inter Miami owner David Beckman’s DB Ventures, which controls the rights to the English soccer star and celebrities including Elvis and Shaquille O’Neal.
During an earnings call in February, CEO David Simon was asked if the company had plans to invest in more struggling retailers.
“If we do, it will be opportunistically,” he said at the time, noting that most of the company’s work has been “on the bankruptcy front or where somebody wanted to unload a business.”
As for this latest deal, the normal plaudits were rolled out as the industry waits on the wider ramifications.
“We are excited for the partnership with Shein as it reflects our shared vision of providing customers with unparalleled access to fashion at affordable prices,” said Marc Miller, CEO of Sparc Group.
“The powerful combination of Simon’s leadership in physical retail, Authentic’s brand development expertise, and Shein’s on-demand model will help us drive scalable growth and together make fashion more accessible to all,” added Donald Tang, Shein’s Executive Chairman.
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